The use of transgenic mice constitutes a powerful approach to the study of gene function and regulation. We are using this technology to investigate several important aspects of cancer progression: the ability of malignant cells to evade destruction by chemotherapy, and the role various growth factors and oncogenes play in the initiation and development of the transformed phenotype. Transgenic mice bearing a human gene (MDR1) encoding a multidrug transporter (P-glycoprotein) capable of conferring multidrug resistance have been generated. As a direct result of expression of the human MDR1 gene in the normally drug-sensitive bone marrow of these transgenic animals, the marrow becomes resistant to the cytotoxic effects of a number of commonly used chemotherapeutic drugs. Since bone marrow suppression is a major drawback to the use of chemotherapy, these transgenic mice are being used as a model to test the efficacy of new chemotherapeutic agents, and to determine if elevated and/or more toxic doses of drugs can cure previously unresponsive cancers. Transforming growth factor alpha (TGFalpha), epidermal growth factor (EGF) and related peptides stimulate cellular proliferation by binding to, and activating the tyrosine kinase of, the EGF receptor. Perturbation of this signal transduction pathway can lead to the transformation of cells in culture, and has been implicated in the development of human cancer. To elucidate the role of EGF receptor and its ligands in various physiologic and pathologic processes, transgenic mice were made bearing DNA fragments encoding either the human EGF receptor or the human TGFalpha gene. Analysis of EGF receptor and TGFalpha transgenic mice have led to significant discoveries about spermiogenesis and mammary gland development. Furthermore, we have found that overexpression of TGFalpha induces hepatocellular carcinoma, mammary adenocarcinoma, and a lesion resembling chronic pancreatitis.